Photo credit: Hugo Roy.
It seemed like a good idea: a mobile app where an entrepreneur could send a pitch to an investor with a single click. ShotPitch wanted to cut short the time it takes to find and connect with an investor, and also help investors to discover startups. But it was short-lived.
Its founder Prashant Sharma, who earlier worked for funding platform LetsVenture, announced the closure of ShotPitch in a blog post yesterday. “It was possibly the only way to get out of a mess beyond our control,” he wrote.
He said ShotPitch wasn’t shutting down for the usual reasons: failure to find a product-market fit, lack of funding, or a co-founder tussle. According to him, it had some good angel investors backing it and many investors from around the world had signed up to ShotPitch. He has not responded to a request from Tech in Asia for an interview.
It seems fair to assume that timing played at least one part in this. ShotPitch launched in November last year, just when the funding bonanza in India began cooling off. Investors have become more cautious and tight-fisted this year, as they reassess the value propositions of Indian startups.
VC funding appears to have cooled down this year compared to 2015. And a survey of 2,281 startups launched in India after June 2014 showed that nearly half of them had shut down within two years.
ShotPitch founder Prashant Sharma. Photo credit: Prashant Sharma.
Legal complications
But there’s more to it than a funding crunch. The grapevine has it that ShotPitch was headed for a legal tussle related to its founder having worked on something similar at his earlier stint in LetsVenture.
No details are available on this, but India’s online funding platforms as a whole are in a grey area. The Securities and Exchange Board of India issued a notice on August 30, cautioning investors that such platforms may be violating the laws on private placement of equity.
Since the platforms make a pitch visible to multiple investors, they may be operating more like securities exchanges. In that case, rules governing stock markets would apply to the startup funding platforms. There is no clarity on this yet.
A fellow of Draper University’s Winter 2014 batch for entrepreneurial studies, Prashant says he’s not ready to throw in the towel.
ShotPitch had a simple proposition. Investors could sign up and receive sets of five pitches at a time from startups, which they could look up easily on their phones while waiting for a cab or riding up in an elevator. For startups, it meant a faster channel for discovering and connecting with investors.
Instead of monetizing through a finder’s commission it had a subscription model with different payment structures for individuals and institutional funds. “Because we are talking of a huge number of people on the demand side – conventional investors as well as technologists – and selling it as an enterprise product to institutional funds, the chunk is big enough. Think of it as replacing the email of analysts at funds,” Prashant had explained on Product Hunt.
Initially, the service was in alpha mode with 15 startups pitching to investors. How it picked the startups and curated the quality of the pitches and investors wasn’t clear.
Perhaps it’s an idea whose time hasn’t quite come yet. But opening new channels of funding for early stage startups on mobile devices seems like a logical extension of crowdfunding and other online funding models.
The immediate next step, writes Prashant, is to tackle the question: “Phir fail ho gaya Prashant. Ab toh give it up.” (You failed again, Prashant. Now give it up.)
A fellow of Draper University’s Winter 2014 batch for entrepreneurial studies, Prashant says he’s not ready to throw in the towel. Something else will turn up soon.
See: Millions still in the bank, GoZoomo shuts shop, returns VC money. The whole story.
This post An idea whose time hadn’t come: app for startups to pitch to investors shuts down appeared first on Tech in Asia.
from Tech in Asia https://www.techinasia.com/shotpitch-pitching-app-for-startups-shuts-down
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